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The annualized yield on a three-year security is 12 percent; the annualized two-year interest rate is 8 percent, while the one-year interest rate is 9
The annualized yield on a three-year security is 12 percent; the annualized two-year interest rate is 8 percent, while the one-year interest rate is 9 percent. The forward rate one-year ahead is ____ percent.
a. 15.57
b. 7.01
c. 103
d. 6
please show work as to how the answer was derived
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